Structuring Equity Compensation for Partnerships and LLCs

Navigating Capital and Profits Interests Plus Section 409A and Tax Consequences

Recording of a 90-minute CLE/CPE webinar with Q&A


Conducted on Tuesday, February 14, 2017

Recorded event now available

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Program Materials

This CLE/CPE webinar will provide employee benefits counsel with an overview of the types of equity compensation arrangements available to partnerships and LLCs. The panel will discuss tax consequences, advantages and disadvantages, design and structuring, and implementation considerations.

Description

Several alternatives are available to partnerships and LLCs for providing equity compensation to their employees, including granting profits interests, capital interests, and options to acquire such interests.

Partnership and LLC equity compensation arrangements present executive compensation counsel with complex design and structuring challenges, unlike corporate equity compensation, which is relatively straightforward.

IRS guidance is lacking on a number of important issues, including whether a partner/member can be an employee for tax purposes, how Section 409A applies, and when 83(b) elections should be made.

Listen as our authoritative panel offers solutions and strategic approaches for structuring equity compensation for partnerships and LLCs and for avoiding common pitfalls that can lead to disastrous tax consequences.

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Outline

  1. Equity compensation alternatives available to partnerships and LLCs
    1. Profits interests
    2. Capital interests
    3. Options to acquire capital or profits interests
    4. Phantom arrangements
    5. Income tax consequences/advantages/disadvantages
  2. Design, structuring and implementation considerations
    1. Section 83(b) elections
    2. Capital account book-ups and valuation
    3. Section 409A considerations
    4. Impact of fee waiver proposed regulations
    5. Effect of partner/member status on being employee
    6. Effect of partner/member status on employee benefits
    7. Conversion to C corporation

Benefits

The panel will review these and other key issues:

  • How does a capital interest differ from a profit interest and what tax ramifications result from the type of equity interest granted?
  • How does Section 409A apply to equity interests in LLCs?
  • Should a Section 83(b) election be made for unvested interests?
  • Can a partner or LLC member receiving an equity interest also be an employee of the entity?

Faculty

Edward E. Bintz
Edward E. Bintz

Partner
Arnold & Porter

Mr. Bintz specializes in employee benefits and executive compensation. He represents clients on a broad range of...  |  Read More

O'Connor, Brian
Brian J. O'Connor

Partner
Venable

Mr. O'Connor co-chairs the firm's Tax and Wealth Planning Group and provides tax advice to partnerships...  |  Read More

Other Formats
— Anytime, Anywhere

Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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